Inside Report (3)

''We need a better abacus,'' said the British official laconically.

Using typical understatement, he meant that Britain must now strengthen its military intelligence-gathering. Three times British forces were surprised in the Falklands campaign: At the number of Argentine forces at Goose Green, at the number of islanders still in Port Stanley, and at the large numbers of Argentine soldiers in the capital.

The Defense Ministry is reviewing procedures to find out why intelligence did not reveal more exact numbers ahead of time. Officials admit concern at the underestimates.